Plug Power Acquires ReliOn for Approx $4M - Analyst Blog

Plug Power Inc. PLUG has acquired Spokane, WA-based firm ReliOn Inc. (“ReliOn”). Plug Power has paid around $4 million in common stock for ReliOn's assets. The company will retain the existing ReliOn employees, mainly sales and engineering professionals, in the acquired entity.

ReliOn provides hydrogen fuel cell stack technology and fuel cell systems. These products feature innovative air-cooled stack design and low-cost snap-and-build stack assembly technology.

Plug Power intends to combine ReliOn's fuel cell stack technology with numerous models of its GenDrive fuel cell systems.

GenDrive is a hydrogen fueled proton exchange membrane fuel cell system. It provides power to the material handling vehicles. The addition of ReliOn's product portfolio will help Plug Power to expand its product offering.

The ReliOn acquisition will help Plug Power to increase the number of the U.S. fuel cell patents by 34. Currently, the company has over 150 U.S. patents associated with the fuel cell stack design, fuel cell system design, fuel processing, fuel dispensing and energy storage and controls. In addition, the transaction is expected to be accretive to Plug Power's 2015 earnings.

We remind investors that Plug Power continues to expand its operations through inorganic ways. In 2012, the company inked a joint venture agreement with Axane, S.A. to form HyPulsion. As per the agreement, the company had to manufacture and sell hydrogen fuel cell systems in Europe.

It is evident from past records that Plug Power has business alliance with Wal-Mart Stores Inc. WMT, AT&T, Inc. T, Sprint Corporation S and several other companies. In Feb 2014, Plug Power received a multi-site GenKey purchase order from retail giant Wal-Mart. Per the contract, the company will supply its hydrogen fuel cell solution to Wal-Mart. Wal-Mart  will use the solution to run the electric lift truck fleets at six North America distribution centers.

We note that ReliOn has a significant presence in the market with installation of above 5,000 fuel cell stacks. The acquisition will enable Plug Power to solidify its existing operations at the fuel cell domain, thereby meeting increased customer demand.

Latham, NY-based Plug Power is engaged in the alternative energy technology domain, focused on the design, development, commercialization and construction of fuel cell systems for the industrial off-road market. The company currently has a Zacks Rank #2 (Buy).